“The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong," says Cablevision in a statement (PDF). "Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want. Viacom’s abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom’s less popular channels.”

Viacom, meanwhile, countered that such arrangements had been “upheld by a number of federal courts and on appeal,” adding that the company would “vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two month old agreement."

Cable networks grabbing their popcorn

Still, cable providers and networks have been unhappy with Viacom’s tactics for years. Last summer, Viacom pulled its own streaming site for The Daily Show with Jon Stewart as a result of the company’s spat with DirecTV. Way back in 2004, Viacom had a similar dispute with EchoStar.

The Hollywood Reporternoted that the Ninth Circuit Court of Appeals declined to overrule a lower court, which dismissed a lawsuit from consumers who were arguing that TV programmers were compelling consumers to accept TV packages they didn't want.

"Tying arrangements, without more, do not necessarily threaten an injury to competition," wrote the appellate court. "Plaintiffs must also allege facts showing that an injury to competition flows from these tying arrangements."

The Los Angeles-based paper also published a number of statements supporting Cablevision from other cable providers, including DirecTV, Time Warner Cable, Charter Communications, and even GMC TV.

"We frequently have pointed out that there are serious problems with the current programming environment,” Time Warner Cable wrote. “We think this lawsuit raises important issues, and we look forward to their resolution in the courts.”

Promoted Comments

It's not that we just want to pick the channels, we want to watch them outside of their arbitrary time slots, and on top of that, we have to fork over huge money to watch shows that have commercials in them, not only from the content provider, but also from our pay TV provider. The simple fact is that this delivery method that is currently employed is outdated, and needs an overhaul.

That's pretty much the Internet's business model, but ask Viacom how much they like the internet.

Bundled channels are their bread and butter. That's how they can ask for more and more money without making it look like arbitrary price increases and why it's hard to find a basic cable plan (not to be confused with the federally mandated over the air package that doesn't include most cable channels) under $60/month these days.

Without bundles, a lot of channels would wither and die. Would people really pay for two different food channels run by the same company? Probably not, at least one of them would likely fold.

2782 posts | registered Jan 31, 2002

Cyrus Farivar
Cyrus is the Senior Business Editor at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar

103 Reader Comments

Yep, everybody but the channels themselves hates bundling, but what are you going to do about it? They own government granted monopolies on those channels (copyright). If you don't like it, there's not much you can do about it. Every couple of years you hear about some cable company that wants to go a la carte, but one phone call from Viacom or Buena Vista shuts them up pretty quickly.

I don't think the government is going to step in here either. They are pretty much in bed with the same companies and don't want to rock the boat.

In short: Most everybody: We don't want to pay for channels we don't watch.Media companies: We don't care, if you want ESPN you need to buy three cooking channels, two reality tv channels, two home improvement channels, 8 talking heads news channels, and everything else we bundle with it.

It's not that we just want to pick the channels, we want to watch them outside of their arbitrary time slots, and on top of that, we have to fork over huge money to watch shows that have commercials in them, not only from the content provider, but also from our pay TV provider. The simple fact is that this delivery method that is currently employed is outdated, and needs an overhaul.

Nothing is more entertaining than watching an over-restrictive, anti-customer monopoly (cable) get into a fight with another over-restrictive anti-customer monopoly (Viacom). However, it does make me sad because no matter who wins this fight between giants, I am fairly sure we lose.

I am tired of watching the commercials and watching the product placement and now the ads That show up in the middle of the show. It seems like you have to pay for everything and the cable companies still screw you over

That's pretty much the Internet's business model, but ask Viacom how much they like the internet.

Bundled channels are their bread and butter. That's how they can ask for more and more money without making it look like arbitrary price increases and why it's hard to find a basic cable plan (not to be confused with the federally mandated over the air package that doesn't include most cable channels) under $60/month these days.

Without bundles, a lot of channels would wither and die. Would people really pay for two different food channels run by the same company? Probably not, at least one of them would likely fold.

In what sense will a la carte cable necessarily fix things though? It's not like there is a clear pricing structure such that each channel has a specific value and that, by cutting out a set of unwanted channels, you have a clear path to reduce your bill by a predictable amount.

In what sense will a la carte cable necessarily fix things though? It's not like there is a clear pricing structure such that each channel has a specific value and that, by cutting out a set of unwanted channels, you have a clear path to reduce your bill by a predictable amount.

I would love to be able to subscribe to just a tiny number of channels and pick and choose which advert free shows I watch, when I want to watch them.

Oh, wait, that is exactly what I do already.

We realized that we barely watched live TV, preferring to record prime-time shows and watch them when it suited us. We also realized, after figuring out what was available OTA, that we were paying a significant price (about $120) for just a couple of 'cable only channels' and a DVR solution.

So we cut the cord.

Now we use MythTV to record OTA prime-time shows (and strip adverts), watching them when (and very much on which ever device) we want to. The odd show that we want to watch which is not available OTA (Walking Dead) is available on a season pass via Amazon, and I think we are spending $20 / month on subscriptions and Netflix and Hulu Plus.

We would go back to cable, but only if there was a true pick and choose your channels option.....

In what sense will a la carte cable necessarily fix things though? It's not like there is a clear pricing structure such that each channel has a specific value and that, by cutting out a set of unwanted channels, you have a clear path to reduce your bill by a predictable amount.

If they did that, I'm sure there would be a few happy CMT or Nick Jr. fans who would love the $1 price.

Ah so. You have a point; if cable were truly and completely a la carte they would have to invent and publish this pricing structure.

I suppose they could still obscure matters by having a set of "core channels" you have to get or by requiring you to buy channels in blocks of ten or something... Basically cable companies are evil and they'll find a way to mess this up.

Another reason I proudly pirate when consuming most media ( which isn't very often, as most of it is worthless shit anyway ). Other than that, I find PBS programming to be the best television available.

I hate to pop anyones $10/month cable bill fantasies; but in a world where the average customer only buys 10 channels instead of 100, the average channel will have to charge 10x as much per customer to cover its expenses. Of course there's no more such a thing as an average channel than an average customer, so the most popular channels may only go from $1 to $3/month, but if any of your favorite channels aren't on the most popular list they'll probably have to go from $0.50 to $10/month and then fold a few months later because the far higher prices cause a large chunk of their audience to decide they aren't worth *that* much more.

Large scale a la carte pricing will squeeze some of the deadwood out of the system; but at the end of the day it's would mean much less savings than most people expect and will probably end up killing at least a few of the channels you watch today.

In short: Most everybody: We don't want to pay for channels we don't watch.Media companies: We don't care, if you want ESPN you need to buy three cooking channels, two reality tv channels, two home improvement channels, 8 talking heads news channels, and everything else we bundle with it.

Everybody: We don't want to pay for shows we don't watch.Media companies: We don't care, if you want to watch Game of Thrones you need to buy Boardwalk Empire, True Blood and everything else we bundle with HBO.

Why stop at splitting it up into channels? There is the argument that by getting the whole channel, you will be introduced to new shows you haven't seen before which you may like, but that same argument could be used for giving you the whole channel bundle too.

It's not that we just want to pick the channels, we want to watch them outside of their arbitrary time slots, and on top of that, we have to fork over huge money to watch shows that have commercials in them, not only from the content provider, but also from our pay TV provider. The simple fact is that this delivery method that is currently employed is outdated, and needs an overhaul.

Time slots aren't arbitrary at all, just FYI. And you can already watch shows outside the time slots, either by signing up for a box that can record or by using the on-demand services. The cable operators have wanted to buy channels individually for a very long time- they waste a LOT of spectrum on the coax lines to pipe channels they know most subscribers don't want and don't watch, and they'd rather use that space for more popular channels, higher resolution programming, and more spectrum for modems to allow more bandwidth on the last mile. Most providers haul a lot of video content through their internal networks these days, and all those junk channels mean wasted traffic as well.

Not much incentive to do that when you can make so much money by not doing that, right?

Haha yeah. Much sadness.

But they don't realize that they're currently in a race for a better system. I get the feeling there are going to be a lot of middlemen out of a job sooner than later. This feeling is eerily similar to rage and frustration as I'm throwing money at my TV trying to get it to stream the latest episode of Walking Dead when I want to watch it.

In short: Most everybody: We don't want to pay for channels we don't watch.Media companies: We don't care, if you want ESPN you need to buy three cooking channels, two reality tv channels, two home improvement channels, 8 talking heads news channels, and everything else we bundle with it.

Everybody: We don't want to pay for shows we don't watch.Media companies: We don't care, if you want to watch Game of Thrones you need to buy Boardwalk Empire, True Blood and everything else we bundle with HBO.

Why stop at splitting it up into channels? There is the argument that by getting the whole channel, you will be introduced to new shows you haven't seen before which you may like, but that same argument could be used for giving you the whole channel bundle too.

This is already happening. If you want to be selective about what you watch, and control your costs with more granularity, most shows, certainly the headline shows, are available on Amazon/iTunes season passes, Netflix, Hulu et.al. News and news video is all over the web. The only real remaining reason to have the cable umbilical is live sports. Once that becomes widely available via streaming then even Joe Average may realize it doesn't make sense to keep the cable companies rich.

Not much incentive to do that when you can make so much money by not doing that, right?

Haha yeah. Much sadness.

But they don't realize that they're currently in a race for a better system. I get the feeling there are going to be a lot of middlemen out of a job sooner than later. This feeling is eerily similar to rage and frustration as I'm throwing money at my TV trying to get it to stream the latest episode of Walking Dead when I want to watch it.

Honestly, why not just jump to a la carte episodes of shows? Why do I need an entire channel? I guess the theory is that I'd be predisposed to like a majority of the programming on a particular channel that happens to host The Show I Like, but my experience indicates otherwise.

If the whole channel costs $X but I only watch one of their shows, why shouldn't I pay a lesser amount $Y to simply watch that show?

Edited to add: I now see that doclivingston and Gooner1 are already discussing this. Whoops...

In short: Most everybody: We don't want to pay for channels we don't watch.Media companies: We don't care, if you want ESPN you need to buy three cooking channels, two reality tv channels, two home improvement channels, 8 talking heads news channels, and everything else we bundle with it.

Everybody: We don't want to pay for shows we don't watch.Media companies: We don't care, if you want to watch Game of Thrones you need to buy Boardwalk Empire, True Blood and everything else we bundle with HBO.

Why stop at splitting it up into channels? There is the argument that by getting the whole channel, you will be introduced to new shows you haven't seen before which you may like, but that same argument could be used for giving you the whole channel bundle too.

This is already happening. If you want to be selective about what you watch, and control your costs with more granularity, most shows, certainly the headline shows, are available on Amazon/iTunes season passes, Netflix, Hulu et.al. News and news video is all over the web. The only real remaining reason to have the cable umbilical is live sports. Once that becomes widely available via streaming then even Joe Average may realize it doesn't make sense to keep the cable companies rich.

I think cable offers another form of utility that a lot of people on the internet overlook: Cobbling together a "cable-like" experience from a bunch of unrelated streaming services is too hard for a lot of people. What would help all the people who want a la carte but don't know where to look on the internet would be the ability to buy something like, say, Comcast's "On Demand", but divorced from the traditional cable offering.

......If you want to be selective about what you watch, and control your costs with more granularity, most shows, certainly the headline shows, are available on Amazon/iTunes season passes, Netflix, Hulu et.al.

Many of the headline shows are available OTA for free - in my area (Orange County, CA), I can get CBS, NBC, Fox, etc in glorious HD/5.1 via a $30 TV Antenna placed on a shelf in a closet. TNT is cable only, which means that we cannot get 'Walking Dead', but that is about it. Near everything else that interests us is available.

Gooner1 wrote:

News and news video is all over the web.

We are missing CNN from the News line up, but most local affiliates have their versions of the news and as it is local, that is fine for us.

Gooner1 wrote:

The only real remaining reason to have the cable umbilical is live sports. Once that becomes widely available via streaming then even Joe Average may realize it doesn't make sense to keep the cable companies rich.

I agree on the live sports, but there is already significant on-lien coverage of many sports, but if you cannot find what you want, then that is a great excuse to hit the sports bar.......

Once someone comes out with a killer tuner/PVR solution that does not rely on an expensive subscription for the guide that is as accessible as MythTV, then I fully expect that cutting the cord will become more mainstream. As it is, the average Joe is not going to build a PC, research tuners, install antennas and spend $300 on a project like this.....

Of course there's no more such a thing as an average channel than an average customer, so the most popular channels may only go from $1 to $3/month, but if any of your favorite channels aren't on the most popular list they'll probably have to go from $0.50 to $10/month and then fold a few months later because the far higher prices cause a large chunk of their audience to decide they aren't worth *that* much more.

DanNeely is completely correct, with one exception. Many, many channels would disappear without the benefit of being subsidized though bundling with one of the handful of very popular channels. But this wouldn't result in consumer prices going down much, if at all, because those popular channels wouldn't be priced by cost but rather by demand. $3 per month might support ESPN, but there's no way in hell Disney would only charge that. They'd charge close to what they charge now for the entire bundle that includes ESPN, because they know it's the most popular channel and all the sports addicts would continue to pay it.

I agree that bundling is in some sense a rip-off. That includes both bundling of multiple channels into a package, as well as bundling multiple shows into a channel. But I haven't yet seen another business model that would continue to support the creation of professional-level content aside from the most popular few percent of channels/shows.

What gets me is the part of the contracts that requires the most popular channels to be part of the basic package offered by the MVPD (Multichannel Video Programming Distributer, ie cable company, satellite company, telco, whatever). To use ESPN as an example again, Disney gets away with charging so much for the bundle in part because they force the cable companies to provide it to all subscribers (aside from the government-mandated broadcast-only tier). While ESPN is the most popular cable channel, it's not *universally* popular. If MVPDs were able to put ESPN in an optional "sports package", enough people would choose not to receive it that the subscriber price would have to increase noticeably to compensate and continue paying the price Disney requires. This would of course cause some additional people to drop their subscriptions, which would decrease viewership (and thus ad rates), which would make Disney ask for more money, which would cause the MVPDs to raise subscriber prices, rinse and repeat. Of course it would reach a new equilibrium point pretty quickly, but it wouldn't make anyone happy other than the people who don't watch ESPN. And unfortunately those people (including me) have already indicated that by and large they're willing to pay for it.

Personally I think the eventual future will be a la carte shows, rather than a la carte channels, and it's going to result in far fewer total shows being available than what we have now.

2012 was my first full year with out any payed cable tv and I plan to continue that practice. I just wish I could convince my dad to get rid of his cable... but I don't think he would survive without his WWF (WWE for those who can't tell the difference between wrestling and a wildlife foundation).

I though it was going to be a lot harder getting rid of payed cable tv and just rely on the Internet, but it really wasn't. I would go to Hulu and the network sites to watch shows streamed. For those networks who dread putting their shows online, there is bittorrent or one of the add-ons installed in XBMC. I also found that I spent less time watching tv shows/channels because they weren't "just there" when I was bored and would just channel surf.

I think if cable had been a la carte, I would probably still have it. Now it's just to late for them to change my decision.

Without bundles, a lot of channels would wither and die. Would people really pay for two different food channels run by the same company? Probably not, at least one of them would likely fold.

And the problem is exactly what? There is not need to have two-three channels playing similar crap content. Just have one and there will be plenty of content for it.

Someone posted posted a table with fees - While I'm not 100% sure of accuracy, still the basic point is sports channels represent very significant chuck of this table and I never watch them at all.

Cablevision have a new package - I think it's called economy which does include sports channels and only a few others which I assume removed due to disney/espn bunlding licensing.

If not for CV's yet another 1 year triple play promo - I would get that package. Heck If real al-carte was possible I'd literally pick 10 channels out of 100 and be willing to pay 50-70% of the current cost.

I have no idea how accurate this is - but I stumbled across this on all things D while trying to find a better cable supplier some time ago.

I would gladly pay some of those prices - my ideal bundle would cost $9.38 / month. Plus taxes and fees and all that - so say $20 / month ....

That is a few years old and that is whole sale pricing based on current bundling practices. These prices have almost 0 correlation to what you would pay if in a a la carte world. Networks like USA charge less then what they could get because of the bundling with channels like Bravo and other NBC/Comcast channels.

In a realistic a la carte world you would have a bill of 30-40 dollars before you start to pay for 1 channel between a base fee and box rentals.

In short: Most everybody: We don't want to pay for channels we don't watch.Media companies: We don't care, if you want ESPN you need to buy three cooking channels, two reality tv channels, two home improvement channels, 8 talking heads news channels, and everything else we bundle with it.

Everybody: We don't want to pay for shows we don't watch.Media companies: We don't care, if you want to watch Game of Thrones you need to buy Boardwalk Empire, True Blood and everything else we bundle with HBO.

Why stop at splitting it up into channels? There is the argument that by getting the whole channel, you will be introduced to new shows you haven't seen before which you may like, but that same argument could be used for giving you the whole channel bundle too.

Without Channels and bundling say good buy to shows like Game of Thrones, Boardwalk Empire, and Mad Men. Well not sure why I mentioned Mad Men because it would have been canceled after every season it has had if it had to make money on its own. No one would take the risk of funding these programs if they did not have other revenue streams to back up in case of failure which is what a TV channel is. Sure these shows became a hit but the graveyard of similar shows that took risk is long.

I hate to pop anyones $10/month cable bill fantasies; but in a world where the average customer only buys 10 channels instead of 100, the average channel will have to charge 10x as much per customer to cover its expenses. Of course there's no more such a thing as an average channel than an average customer, so the most popular channels may only go from $1 to $3/month, but if any of your favorite channels aren't on the most popular list they'll probably have to go from $0.50 to $10/month and then fold a few months later because the far higher prices cause a large chunk of their audience to decide they aren't worth *that* much more.

Large scale a la carte pricing will squeeze some of the deadwood out of the system; but at the end of the day it's would mean much less savings than most people expect and will probably end up killing at least a few of the channels you watch today.

This this this. You like sports you will end up spending more then you do now. ESPN is subsidized by the 80 percent of non watchers. Basically if you like any channel that is not USA, TNT, FX and the similar broadcasters that just happen to be on cable or Sports your channel is going to be on borrowed time.

It's not that we just want to pick the channels, we want to watch them outside of their arbitrary time slots, and on top of that, we have to fork over huge money to watch shows that have commercials in them, not only from the content provider, but also from our pay TV provider. The simple fact is that this delivery method that is currently employed is outdated, and needs an overhaul.

Overhaul? I overhauled. I cut the damn cable. Haven't missed it a bit.

I suspect that unless someone is successful in pulling the ball out of their greedy little fingers millions will be following me...

It's nice that cable providers are searching for an a la carte solution for themselves, but until it makes it down to the actual consumer, I'm not sure that it changes much.

Not that it matters to me, though, I cut the cord a couple years ago and have never been happier with the (legal) alternatives. It helps not being a sports fan.

Are you willing to share your (legal) alternatives?

Depending on your viewing habits.....

OTA programming combined with MythTV as a DVR gives you the majority of the major stations (ABC/CBS/Fox etc) with the major standout-losses being TNT (for Walking Dead) and ESPN / Fox Sports.

For TNT shows you can look to Amazon Prime (for a couple of dollars / show) or iTunes.

For other shows that you forgot to record or you want to re-live, Hulu-Plus (for $6 / month) fills a decent void.

Which leaves sports, ESPN streams some events and some of them are on CBS (OTA). The only sports I follow tend to include engines and wheels, so...For NASCAR, about 1/2 the races are on Fox (OTA) the rest I can choose to watch on line (via NASCAR.com) or we can head to a sports bar and eat lunch and drink a chilled beverage or two while watching....Same deal for Indycar which seems to have a great on-line presence though.

F1 is mostly impossible to watch live - not that the time zones help, some of the races are on Fox this year though and last year many of the races were available on F1.com a few days later, oh and there is no MotoGP coverage unless I subscribe to MotoGP.com too....

As stated before, we time-shift nearly all of our TV viewing, so for us, it is not an issue at all.